Hundreds of retailers on 'critical list' as high street sales war intensifies

The high street sales war intensified on Saturday as experts warned that
hundreds of retailers were now on the "critical list" and at risk
of going bankrupt.

Almost all stores on Oxford Street, London's busiest retail centre, will be open for business on Boxing Day this yearPhoto: HEATHCLIFF O'MALLEY

By Alastair Jamieson and David Harrison

4:08PM GMT 20 Dec 2008

Shoppers flocked to malls and town centres on the last Saturday before Christmas, attracted by the huge discounts on offer. Similar scenes were expected today as retailers predicted sales would total £6 billion for the weekend.

Fiona Wilkinson, from credit card company Visa Europe, said that sales peaked at 12.15pm yesterday when the company recorded 700 transactions being made every second.

Despite the festive crowds, however, there were new signs of desperation, with thousands of supermarkets, department stores and independent shops making plans to open up on Boxing Day for the first time.

* House of Fraser said it will open 51 branches on December 26 this year – a "significant increase" on the number in 2007 and more than double the number it opened in 2006. Sainsbury's is to open 36 of its largest stores for the first time.

* On London's Oxford Street, Britain's busiest shopping thoroughfare, almost all shops will trade on Boxing Day, compared to three quarters last year.

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* Tesco will open 179 of its large "Extra" stores on Friday, more than three times the number it opened last year, along with 10 of its "Home" stores and 950 "Express" outlets.

Experts predicted the biggest change would be the number of small shops opening on December 26 in order to compete with the aggressive sales of big chains.

John Dean, chief executive of the British Shops and Stores Association, which represents independent retailers across the UK, expressed sadness at the change. He said: "I can understand why independent stores might open on Boxing Day because of the need to shift product and improve cash flow and it illustrates the level of desperation that some businesses are experiencing.

"It is sad because those traders will lose the time that used to be set aside for spending with family at Christmas. It used to be sacrosanct but as a society we have sold out because of the pressure to go shopping on Boxing Day."

Warren Bradley, leader of Liverpool City Council, said: "Last year about three quarters of retailers said they would open on Boxing Day but almost everyone says they will this year and the big difference is the smaller independent shops that hope to get business from tourists because of the exchange rates."

The Bishop of Hulme, the Right Rev Stephen Lowe, described increased Boxing Day trading as a "sad, retrograde step". He said: "It appears we have learned nothing from the events of this year by encouraging yet more spending even though we have seen the consequences of debt and financial problems."

High street shops were reporting a busy trade on Saturday.

"It's busy out there," Jace Tyrrell, spokesman for the New West End Company which represents traders in London's Oxford Street, Regent Street and Bond Street, said.

"The weather's good and people are spending money and carrying lots of shopping bags. The discounts are still there but I don't think we'll see any more big reductions until perhaps Christmas Eve when we may well see some sneaky last-minute sales."

A spokesman for Capital Shopping Centres, which has interests in 14 regional shopping centres, including the MetroCentre in Newcastle-upon-Tyne and Lakeside in Essex, said: “Shoppers have held out for the bargains this year. With just five shopping days left to go, we are seeing an influx of guests to our centres.

With sales of luxury goods collapsing, high-end retailers are holding secret sales in the run-up to Christmas because they are "too embarrassed" to have open sales.

Stores including Liberty, Net-A-Porter and Richard James have offered discounts of up to 60 per cent but most are refusing to put "Sale" signs in their windows and are instead inviting customers to special events and private "sale" websites to offer goods at reduced prices.

So far the massive cost cutting has failed to increase shops' turnover.

More than two thirds of stores saw their turnover fall in the first half of December and footfall – a record of the number of shoppers – was down 11.2 per cent last week compared to the same time last year.

Experts warned that hundreds of retailers might not survive. Corporate rescue specialists Begbies Traynor More said that none than 300 UK retailers are on the "critical" list and have a 70 per cent chance or more of failing.